UK advisers turning away clients, research shows

New research shows nearly half of UK advisers turn away five potential clients each month, with the overseas industry expected to continue shrinking, according to financial services group Prudential.

In a statement, the firm said the study of 206 advisers in the UK found 49 per cent have turned away up to five potential customers, with 10 per cent having to reject six or more people.

More than half of the advisers (51 per cent) said they expect the total number of advisers to fall by 5 per cent or more during 2016.

The wave of new clients is now coming from the professional services sector, including accountants and solicitors, the statement said.

About 11 per cent of advisers said referrals from the professional services sector is "the biggest contributor to their new business pipeline". A further 40 per cent said they expect to see referrals increase from professional services over the next 12 months.

Prudential's head of business consultancy for advisers, Paul Harrison, said the analysis of this pipeline over the next 12 months reveals "some interesting trends".

"What stands out is that the quality of the service and value added by advisers is increasingly a new business referral tool in itself," he said.

"Although demand for advice has exceeded supply, the advice community has reacted strongly to increase capacity by streamlining and improving their service proposition.

"The past few years have been a period of sustained change for advisers so it is worth remembering and re-stating the real value of what advisers do for their customers."

In March, the Financial Conduct Authority published a report with recommendations that look to address the UK's difficulties with an "advice gap", which emerged as a result of adviser losses following new industry reforms, including higher education standards.

A report by financial services organisation True Potential found that as at December 2015, the UK industry was made up of 22,500 working advisers – equivalent to one adviser per every 1,000 potential clients.

"Too few advisers, too many potential customers with a growing need to save more, and finally a payment system that encourages financial advisers not to look for new clients, easily explains the entire problem," the organisation said at the time.